TV Upfront Market Heats Up

Fox Close to Done, Buyers Say; Other Networks Talking, Dealing

NEW YORK (AdAge.com) -- The 2010 upfront market started to move in earnest today, when negotiations ramped up at all five broadcast networks and Fox verged on wrapping up sales, according to media buyers and other people familiar with the negotiations.

"The bulk of it needs to be done on everyone but Fox," said one media buyer, who suggested the News Corp. network was close to completing its upfront sales. This buyer said talks at NBC, CBS, ABC and CW were "heating up," and that subsequent upfront deals for cable and syndicated TV would likely move at the end of this week or sometime next week.

Fox was said to be decidedly ahead of its rivals in terms of nearing completion, owing to interest from auto makers, Fox's high ratings in viewers between 18 and 49 years old -- the choice demographic of advertisers -- and the fact that Fox has significantly less inventory to sell than NBC, ABC and CBS. Fox was securing increases of 8% to 9% in the cost of reaching 1,000 viewers, a measure common to these kinds of negotiations also known as a CPM, according to buyers. A Fox spokeswoman declined to comment.

Ad buyers have suggested the networks would get CPM increases ranging from 5% to 9%.

The TV networks will be heartened by the early activity in this year's upfront market, an annual haggling session during which the big TV outlets try to sell the bulk of their ad inventory for the coming season. Last year's market was perhaps the most glacial in recent memory, with advertisers holding fast to their dollars until they could cadge price rollbacks from media outlets.

Moving more briskly
But business is moving more briskly this year. Even while broadcast outlets try to turn haggling into real money, top-tier cable outlets are learning of advertisers' available budgets, getting cable in position to begin its own upfront process.

Sensing the new momentum, networks other than Fox may be trying to secure price increases that advertisers feel are just a tad too steep, several media buyers suggested. TV executives have felt some wind at their back in recent months, owing to their ability to secure 10% to 30% price hikes in the cost of so-called scatter advertising, or commercial inventory purchased much closer to air. But the economy remains tight, ad buyers argue, and some of the CPM increases surfacing in negotiations at networks other than Fox are viewed as too high.

One concern in the marketplace is that CBS, which finished the year with a very stable lineup of popular shows and the broadest audience of the four big networks, will try to secure price increases at Fox's level or higher, said two media buyers. Advertisers, these buyers said, are extremely loathe to pay double-digit price increases.

NBC is "having active conversations" with advertisers, according to one person familiar with the situation. One media buyer suggested the network hadn't completed many deals yet and faces some headwind in the market. This fall NBC intends to launch a great deal of new programming that some advertisers may view as "untested," the buyer suggested, a year after signaling it would cut back on production of original scripted fare. As such, the buyer said, the network could have a tough time being aggressive in negotiations.

ABC has started doing some selling, Bob Iger, CEO of network parent Walt Disney Co., said while speaking to investors today. Mr. Iger said ABC was "in the middle of selling," but emphasized the network was "too early" in the process to give hard details on its upfront negotiations. He added that business completed so far "has been good and in line with what we expected."

CBS "is in the midst of" discussions, Leslie Moonves, president-CEO of CBS Corp., said during a presentation to investors today. "The numbers are where we would like them to be," he said. "It's a very strong marketplace." He suggested networks were seeing activity from advertisers in a range of different categories.

At the CW, the network owned jointly by CBS and Time Warner, upfront sales are "moving rapidly," said Paul McGuire, a network spokesman. The CW "is seeing growth" in key ad categories, including retail, wireless and health and beauty, as well as "resurgence with autos, both domestic and foreign," Mr. McGuire said.

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Brian Steinberg

Brian covers the big broadcast television networks and also looks at changes in the world of TV advertising. He particularly enjoys stories that have a pop-culture element to them, but that doesn't preclude him from being open to all topics. Use email or phone to contact.